Halliburton's Smart Approach

The oilfield services company rode its unique advantages to impressive 2011 results.

At times, intangible benefits offered by a company can make a big difference in the long run. That's where oilfield services major Halliburton(NYSE: HAL) had been sharply focusing on last year, as evident from its earnings call yesterday. Investors should realize that this is strategy that has helped before, and will continue to be of critical importance in the company's quest to win loyal customers -- a prerequisite in oilfield services.

Uncertain, yet promisingFool analyst David Lee Smith has given a basic breakdown of the company's fourth-quarter results, which beat consensus estimates. However, he advises caution due to the shifting dynamics in the North American oil and gas industry. With natural gas still facing miserable market conditions, exploration and production companies are moving toward oil-directed activity in the unconventional shale plays.

As a result, oilfield services companies are moving infrastructure-related equipment to what is referred to as a "liquids rich unconventional resource base." This has actually reflected in a dip in revenues in the third quarter. Management, however, thinks that the impact of relocation of crew and equipment, along with related logistical challenges, should not reflect beyond the first quarter of 2012.

There's no reason to disbelieve these assurances, and logically speaking, the following three quarters of the year should see robust growth in revenues beyond current levels. Here's the reason: Drilling and completion services for oil wells are more comprehensive and intensive, which requires more advanced technology -- a service Halliburton is capable of providing. And this has the potential to create an edge over its peers.

A smart moveAdditionally, Halliburton seems to be intent on taking completion services to a whole new level. The fourth quarter saw the company spending $23 million in strategic projects just to beef up its North American service delivery and supply chain. Management calls it a hyper-efficient business model which goes beyond 24-hour operations. This is where the company provides intangible benefits, strengthening existing relations with customers.

Last year witnessed unprecedented success in its North American operations, and this was partly due to the comprehensive package that Halliburton has been providing. The company was able to sell at least four other product lines to customers who had contracts for its fracking equipment (another brownie point in Halliburton's favor).

While Schlumberger(NYSE: SLB) -- the big brother in the industry -- definitely has its advantages, things are definitely becoming more competitive and Halliburton isn't willing to back down an inch.

However, the Gulf spill continues to haunt the company as a Louisiana federal judge has ordered it to hand over to BP(NYSE: BP) a computer which contains results from tests conducted on cement that was used for the Macondo well. A possible penalty might rock the boat if discriminating evidence is found.

Foolish bottom lineThe overall picture, however, looks bright going into 2012. Halliburton might be better off than what most think. To stay up to speed on the top news and analysis on the company, you can start here by adding it to your watchlist.